It’s a Wrap!


In Part 12: The Importance of OCIP Audits, we reviewed the need for periodic audits during the course of construction. We also noted the requirement for conducting a final audit as part of the OCIP project close-out process. We will now pull all the pieces of the puzzle together and basically wrap-up our wrap-up insurance program discussion.


As we noted at the outset of this series of articles/posts about owner-controlled insurance programs, OCIPs are an increasingly popular risk financing approach, and an insurance procurement option. They are typically used on large capital construction projects with many contractors and subcontractors, and for projects with total construction values in excess of $100 million. They can also be used effectively with various groups of smaller projects with multiple sites that aggregate to at least $50 million in TCV annually.


Note: Over the last several years, many states have lowered the minimum threshold for the use of wrap-ups. Consult with your state insurance laws for specific details. An OCIP can definitely provide project owners with some advantages over a traditional insurance program, including:


  • Substantial savings potential
  • Broader insurance coverage
  • Higher policy limits
  • More efficient claims management
  • Better safety and loss control procedures.


In addition, OCIPs offer many of these benefits to contractors and subcontractors who choose to participate in an OCIP.


Remember, every project is different and comes with its own unique risks and exposure. An OCIP may not always be the best choice for every project, from an insurance & risk management perspective. That’s why project owners who are thinking about using an OCIP on their project, or any other type of wrap-up insurance program, should initiate a formal assessment process that includes a comprehensive OCIP feasibility study.


After the feasibility has been determined, a project owner should structure the OCIP carefully, with the help of a competent risk management professional. Like everything else in the construction industry, careful planning, a skilled project management team, and effective administration practices are key components of a successful OCIP.


At least now, you have some answers to the question, how to build a better warp-up? When it comes to managing any process, especially on a construction project, it is critical to have a sound foundation, effective project management, and good financial controls.


Whether your wrap-up insurance program is an OCIP or a CCIP is irrelevant. All you need to remember is your A-B-C’s.

A successful wrap-up requires the following:


  • Administration
  • Bid Documentation
  • Coverage
  • Claim Management
  • Communication
  • Coordination
  • Commitment, and
  • Control


The most important “C” in this list is “Control”, as in owner Controlled insurance program (OCIP), contractor Controlled insurance program (CCIP), or any type of Controlled insurance program (CIP).


Another thing to remember. The increasing complexity of today’s construction projects requires thoughtful leadership and strategic insight from an experienced insurance and risk management professional who is a wrap-up subject-matter expert (SME) with practical experience in designing, structuring, and implementing OCIPs.


A project owner needs a competent professional on their team who can not only talk the talk, but who can walk the walk. Someone who is extremely knowledgeable in managing an OCIP from the feasibility phase, through the design of the OCIP insurance program structure, through implementation, administration, close-out, and audit. A risk management advisor with practical insight will ensure a project owner a higher probability for success on their OCIP project.


Hope you enjoyed this post. I will look forward to your comments. I will share more Insights in future posts.

In OCIP 2.0 – Part 14, we will review some frequently asked questions (FAQs) about OCIPs.

Thank you for visiting and reading C-Risk Insights.

Until next time…




David Grenier is the Managing Director and Principal Consultant at C-RISK, LLC.

C-Risk is a risk management consulting company that provides strategies and insights on wrap-up insurance programs to help project owners in the public and private sector who are involved with large capital construction projects.


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